@roxieroo444 wrote:
Thank you for your quick response. Please clarify as I am a novice here. Since we are both over 59 ½, for IRS purposes I don’t need to keep any records except our tax returns? And I have filed 8606s so keep the returns from the first year filed forward?
If we were to get audited are the 1099-Rs, 8606s, and 7+ years of returns enough for the IRS?
Do I need to keep the 5498s or investment statements? Thanks Again
First let me correct my previous response because I missed something that @dmertz pointed out.
For traditional IRAs when you have non-deductible contributions, you need your most recent form 8606, that keeps track of your non-deductible basis. Each year that you withdraw from your IRAs, you use the most recent previous form 8606 to determine your tax, and you will generate a new form 8606 that you will need the next year.
For Roth IRAs after age 59-1/2, you don't need any other documents. You need to keep track of direct contributions and rollovers/conversions before age 59-1/2, but after that it doesn't matter.
Regarding the statements that show the performance of your IRAs, you never need them for tax purposes. The kinds of investments you had and their individual performance numbers don't matter. Withdrawals from the IRA are taxed as ordinary income no matter how your contributions were invested.
Regarding performance statements for non-tax deferred investment accounts (if you have any such investments), what you would need for your tax return is the tax statements provided by the broker (1099-B, 1099-DIV, etc.). The only reason to keep detailed performance records is if you wanted to double-check the broker's figures on the tax statements.
You don't need the 5498s as long as they agree with your tax returns (in other words, if you took a deduction for $6000 of contributions in 2020, your 2020 form 5498 should match that).
In general, I would save important tax papers for 7 years. That includes the tax returns, form 1099 and form 5498. After 7 years you can discard them, except that you need to keep your most recent form 8606 even if it is more than 7 years old. The IRS can't audit you after 6 years unless they have evidence of deliberate and substantial fraud.
